Out of a total population of around 7.36 million, around one in seven people in Hong Kong is now a millionaire, and property is the main investment vehicle.
Rising property prices as well as growing stock markets have both contributed to the increase in the number of Hong Kong’s millionaires to one million last year – classed as those who posses liquid assets including deposits, mutual funds and stocks and bonds worth at least HK$1m (around £89,950).
According to Citibank, 68,000 citizens in Hong Kong have HK$10m (£899,400) or more, which is a huge amount of money in the region but doesn’t go as far as one might think in terms of local real estate, with average properties costing around 19.4 times the average income. For example, in Mid-Levels West – a prime, sought after region with some of the top house prices – Knight Frank recently had a small one-bedroom apartment, of just 456 square feet, listed for sale at HK$12,500,000, which equates to around £1.1m.
Rising property prices
Around 70% of Hong Kong millionaires’ assets were in property, with each possessing an average of 3.2 properties, rising to 3.7 for mainland millionaires. This was followed by cash, making up 14% of investments, and stocks at 9% in Hong Kong.
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Lawrence Lam, head of retail banking at Citibank Hong Kong, said: “Looking ahead, the number of millionaires will increase in 2018. The stock market sentiment is strong while property prices will keep rising even with the interest rate rises.”
More than half (55%) of the money generated by Hong Kong millionaires came from their wages, according to Citibank, with the majority of the rest coming from investments and inheritance, while 21% of Hong Kong millionaires said they own their own business.
With Knight Frank forecasting a 10% increase in property prices in Hong Kong over the course of 2018, the number of millionaire real estate owners should be set to rise, although the increasingly unobtainable prices could see new buyers priced out of the region – and begin to increasingly look elsewhere, such as the UK, for more affordable investments.
